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2.0 out of 5 stars Preaching to the Choir, November 8, 2007
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This review is from: The Conscience of a Liberal (Hardcover)
"Being progressive,'' says Paul Krugman in the concluding pages of The Conscience of a Liberal, "means being partisan." Like Krugman, my training lies in economics, but unlike Krugman, I am not partisan. Rather, I take a policy orientation to social issues: there are problems to be solved in order to enhance the lives of citizens, and it is our job to discover and publicize solutions to these problems. Krugman's partisan stance only clouds the issues. For Krugman there is a "union movement" rather than a "bureaucratic labor aristocracy," critics of the welfare states want to "turn back the clock," rather than streamline and curb the inequities of the welfare state, conservatives have won by "exploiting cultural backlash" rather than by mounting a principled opposition to the explosion of crime, drug abuse, and single-headed households in a manner that resonates with the voting public. Critics of the wealth tax are "financed by a handful of [super-rich] families," with the public being ignorant dupes of the slick politicians.

This book epitomizes what is wrong with American liberalism. Krugman was a fine, perceptive international trade theorist, but he compromises his capacity to help non-economists to understand complex technical issues by professing himself as "partisan." Krugman is drawing down his well-deserved scientific stature by presenting partisan ideas as though there are no other credible positions on economic policy.

There is one problem as far as Krugman is concerned: inequality. But inequality is an intellectual abstraction, not a politically motivating issue. People hated the Robber Barons because they were robbers and barons, not because they were rich. Oprah Winfrey and Bill Gates do not send the Pinkerton men out to protect their ill-gotten gains; nor to the other super-rich. Socialists' ringing political slogans dealt with fairness, social progress, and power to the people, not "inequality." Moreover, a truly progressive movement must built on technical progress that is impeded by the reigning powers that be (Sam Bowles and I call this efficiency-enhancing egalitarian redistribution), not the beggar-thy-neighbor, zero-sum-game sort of redistribution favored by Krugman.

I suspect Krugman is correct in saying that the degree of inequality in the USA today is the product of politics, not economic necessity. This is because some advanced industrial countries have more equal distributions of income and wealth that the USA. But, these countries are plagued by labor market inefficiency and deeply threatened by the "lean and mean" up-and-coming countries like Poland, the Baltic States, Romania, India, et al. The USA has purchased a thriving economy and full employment at the cost of having a bunch of super-rich families. Not a bad deal, after all.

Krugman's vision for the future has three key premises, all wrong.
First, he believes progressives can win on a platform of redistributing from the rich. However, no one cares about inequality. People care about injustice, unfairness, poverty, sexual predators, family values, gay marriage, terrorism, and many other problems of everyday life. People don't care about Gini distributions and other abstractions. Moreover, Krugman should know that if the wealth were redistributed to the middle class, the US investment rate would fall, since the rich save their money and it is translated into investment, whereas the middle classes would spend their gains on consumption, thus driving out investment. A "soak the rich" policy simply cannot work to the advantage of the middle classes.

Second, Krugman would strengthen the labor unions, which he credits for their egalitarian effects. However, unions were strong only when industry was highly non-competitive in such areas as automobiles and steel. The oligopolistic character of mid-twentieth century industry, with a few countries in the lead, made fighting over the excess profits highly rewarding. With globalization, there are no excess profits to be fought over. Thus, it is not surprising that most successful unions in the USA are public service, not private (e.g., teachers, government employees). There is no future in unionism, period.

Third, Krugman believes that liberalism can be restored to its 1950's health without the need for any new policies. However, 1950's liberalism was based on southern white racism and solid support from the unions, neither of which exists any more. There is no future in pure redistributional policies in the USA for this reason. There are very serious social problems to be addressed.

I am adding the following remarks on December 19, 2007 in response to some of the personal and public comments on my remarks. These should be seen as clarifications.

Many commentators consider my remarks on Krugman's partisanship as unwarranted because Krugman has always spoken his own mind, and has never toed the (ever-changing) Democratic "party line". For instance, it is widely thought that Krugman was passed over by Bill Clinton for heading the Council of Economic Advisors (in favor of Laura Tyson) because of Krugman's opposition to "industrial policy." Now, thankfully Clinton did not follow the "industrial policy" suggestions of Robert Reich, Robert Kuttner and others, but we must thank the forceful interventions of Krugman (and others) for exposing "industrial policy" for what it is---mainly an unsupported set of statements that would likely have weakened the American economy considerably.

Partially because of the adament opposition of key Democratic economists, including Krugman, Clinton opted for a sound economic policy---one of the strongest points of his adminstration. But now, industrial policy is not fashionable, and protectionism has not been a major part of Democratic political philosophy, pace Robert Kuttner. Indeed, as far as I can tell there are no issues of fact that separate Republic and Democratic policy thinkers concerning the running of the economy. More broadly, burning political issues of domestic social policy today revolve around values and not facts, and around the personal characteristics of politicians rather than the economic models that they embrace to deal with setting a policy agenda for the country. In this setting, it is not surprising that Krugman would become a partisan political actor, as I have suggested has happened. At any rate, I am virtually certain that should really stupid economic ideas pop up as the Presidential race heats up, Krugman would come out fighting, at the cost of his credibility with some Democrats, in favor of economic realities.

Some have asked me what Krugman should be stressing, if not redistribution of wealth and income. Here are some suggestions. First, a vision of national health insurance that answers the (legitimate) objections of its critics. For instance, instead of single-payer, perhaps state-by-state regulation of universal care, much as current welfare and automobile insurance. Second, he should come out in favor of school vouchers and charters, and otherwise suggest how to make the educational system more competitive. Third, he should embrace faith-based interventions into community service, especially as concerns the urban poor. Fourth, he should propose a national system of apprenticeship skill acquisition, whereby firms are subsidized when they train their workers (government intervention is needed here because once trained, the worker can simply leave the firm for higher wages). Fifth, he should propose a plan for promoting minority entrepreneurship. This is of course a land mine, because it is so subject to corruption and unfairness. However, there are some degrees of freedom in this area, such as promoting minority business networks, specialized vocational training for minority entrepreneurs, and the like. Sixth, he should propose a precise way forward in dealing with environmental issues (nuclear, solar, coal, oil, endagered species, etc.) There are many people working hard on these issues whose ideas never get beyond the scientific conference and the pages of the Proceedings of the National Academy of Sciences, and their ideas are often very sound. Seventh, promote the labor market and educational policies of Nobel prize winner James Heckman and others who have a good take on the numbers and what forms of intervention are likely to be fruitful.

But most of all, Progressives need a vision of what real contributions we can make to improving the lives of Americans and the citizens of the world. Income redistribution away from the very rich may (or may not) necessary to achieve this vision, but Krugman's beggar thy neighbor ideas do not contribute to this vision.
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Showing 1-10 of 45 posts in this discussion
Initial post: Nov 13, 2007 12:14:07 PM PST
Betty says:
This is the only negative review here that contains evidence that the reviewer has actually read the book, so it deserves a reply. It is fair to question Krugman's conclusion that, after over a decade of Orwellian spin by Rove, Gingrich, DeLay and other movement conservatives, it is necessary for liberals to become more partisan. I too wish it weren't necessary. But Krugman's overall thesis about conservative thinking and motivations is the only way I can understand things like the SCHIP veto and votes to sustain it. Political discourse and compromise are just not possible with those who would block extension of a very successful program that addresses an important part of our obvious health care problem but is viewed as a small step toward "socialism." (Sure there were other arguments, but not arguments that explain the veto.)

I thought Krugman and others have demolished the argument that the dramatic increase in the superwealthy is in any sense a cause of our economic success. Sure, 500-1 income disparities rather than 50-1 makes our savings rate a little less bad, but there is no evidence the change to ever larger disparities has an effect on motivation, and it does increase our sense of injustice and unfairness. No one is arguing for income disparities of much less that 50-1.

Regarding Krugman's incorrect 3 key premises:
1. If you read the book carefully, his suggested platform is to focus on fixing our inefficient health care system, not income redistribution. A little income redistribution will happen as we pay for a health care fix, but most of the cost of the fix will come from eliminating the gross inefficiencies in our private pay system.
2. I don't recall labor unions being a big part of Krugman's suggestions for the future other than to have the government stop being hostile to uniions. Sure, there are other reasons unions have declined.
3. As for lack of new ideas, Krugman's proposals for the future are pretty modest beginning with health care where all we need to do is carefully select and adapt from among the ideas that are already working well in other democracies. After what the neocons have given us, I think we want practical solutions that are in touch with reality, not any more big ideological ideas.

Posted on Nov 14, 2007 6:18:24 PM PST
Last edited by the author on Nov 14, 2007 6:47:54 PM PST
A. J. Sutter says:
I'm confused by the mention of the "bureaucratic inefficiency" of France and Germany in contrast to the US: does this mean bureaucracies in the US are efficient? If so, in what sense?

As for Americans not caring about inequality, isn't it simplistic to take poll data at face value? (I'm assuming polls are the source of the remark -- otherwise, what's its foundation?) Hasn't there also been a rhetorical push, especially by those whom Prof. Gintis calls "Pigs" in politics, and especially since the days of "trickle-down" theory, to persuade the general public that

(A) inequality reflects just deserts, and/or
(B) ... grows out of the natural-law-like force of the market, e.g. because of the attenuated talent pool for CEOs, or else
(C) it's an illusion, because actually anyone can strike it rich if they have enough gumption, or know how to invest (notwithstanding the unmentioned rich-get-richer mechanics of the financial markets, which come to light only in the most egregious cases)?

Even Lou Dobbs seems to subscribe to a version of this world-view, despite fuming nightly on behalf of the "middle class". Average voters don't have the same access to media conglomerate cameras, microphones, and presses as do the wealthiest in the country. I don't think a thoughtful political analysis can simply ignore the mass media's stream of free-market rhetoric throughout the past quarter century. Prof. Gintis, can you explain why Americans don't care about inequality?

In reply to an earlier post on Nov 19, 2007 11:32:53 AM PST
Last edited by the author on Nov 19, 2007 11:35:46 AM PST
Frankly, I do not know why people don't care much about inequality. But, it is true. In fact, my reading of history is that "inequality" has never been a politically motivating iussue since the evolution of settled agriculture (hunter gatherers were probably very egalitarian---See Chris Boehm's Hierararchy in the Forest).

People strike back at what they perceive to be injustices. Having a lot of money is not an injustice. To repeat an idea from my review: people hated the Robber Barrons because they were robbers and barons, not because they were rich. The labor movement was strong when it was perceived that firms were making superprofits that could be more equitably shared with the workers. Gender inequality and racial discrimination are opposed because they are unfair, not because they lead to an unequal division of wealth.

Politics is about ethics, above all. This is what the liberals do not get.

Actually, liberal ethics are highly laudable from my personal standpoint. The envirionment, poverty, discrimination against minority life-styles, and the like are very important and progressive issues, and the women's movement is simply the most progressive and important movement in the world today. But, these issues don't win many elections these days, so the poor democrats have to find something they think will resonate with the voters---soak the rich seems to be it.

Can you imagine that the Democrats have a chance of losing the next presidential election, given that the current regime is about the most abysmally performing government ever? I have never voted Repulbican, and third party people like Nader are worse than cancer (they gave us George W., after all). But I have to take deep breaths and think about other things when I pull the Democratic level in the voting booth.

In reply to an earlier post on Nov 27, 2007 6:45:27 AM PST
What an amazingly awful review, recapitulating every cliché of the Right. A radical critique of Krugman is certainly possible, but there is little of it in this review. Of course when you wash the political economy -- the exploitation, the amorality relative to the common good -- out of inequality, you get something that does not motivate anyone politically. Said washing out is the conservative project, and also the apparent purpose of the HG review. There's something baffling and perverse about this desire to burn bridges. Maybe David Horowitz could explain it.

-- Max Sawicky

Posted on Nov 28, 2007 12:04:53 AM PST
"Moreover, Krugman should know that if the wealth were redistributed to the middle class, the US investment rate would fall, since the rich save their money and it is translated into investment, whereas the middle classes would spend their gains on consumption, thus driving out investment"

It is well recognized that the period between the end of WWII and the early 1970s was a period of an unusually high rate of growth in the economy's productive capacity. But this was a time during which inequality was unusually low, both compared to the past and the period after that. This certainly motivates one to question the hypothesis that the greater the inequality, the greater the rate of economic growth.

Posted on Nov 29, 2007 9:07:35 AM PST
Prof. Gintis,

I have a great deal of respect for you and I appreciate the time you took to review this book but aren't you being a little harsh? Is there nowhere important that you agree with Krugman? If there is a market for partisan writers, isn't it good that someone as learned as Krugman is one of them? I'd also argue that he's more intellectually honest than most political pundits.

Yes, we'd all benefit if Krugman talked less about inequality, and more about specific policies which should be supported because they are fair and improve peoples quality of life at a relatively low cost. I'm a sociologist in training who is very concerned about policy but I think I'm being honest, fair and wise when I tell people that I believe that the current contenders for the Republican presidential nomination are morally deficient or that, with some exceptions, the Democrats agenda is more moral than the Republicans.

Posted on Nov 29, 2007 10:48:00 AM PST
Tom says:
"Gender inequality and racial discrimination are opposed because they are unfair, not because they lead to an unequal division of wealth." ...And what is the usual outcome of being unfair? It leads to a person or group with more wealth and more political influence getting an economic or political advantage, sometimes a very large one. Wasn't that the original motivating force behind things like affirmative action laws? I think the good professor doesn't extend his thinking far enough, and on this point has arrived at a distinction without a difference.

Posted on Dec 1, 2007 3:10:54 PM PST
Last edited by the author on Dec 1, 2007 3:15:59 PM PST
Stilgar says:
Interesting attack on Krugman's book, but all Gintis manages to do is to repeat conservative economic talking points mixed in with the usual tripe about "liberals" and how "they just don't understand how the world really works" bulls--t. I think after more than 6 years of conservative economics (with all of the inequality that it is designed to promote), it is no wonder that most Americans are concerned about the economy. So yeah, Mr.Gintis is off base if he thinks that redistributionist policies don't resonate with the American people. My favorite quote is this, "Conservatives, on the other, are political sophisticated and hold clear visions of what they want."...that really makes me laugh. Watching the recent Republican debates, political sophistication does not come to mind! The other thing that made me laugh was his prediction that liberalism is in danger extinction reveals just out of touch many conservatives are about the political mood in this country....better take off the blinders, or you guys are going to take a bite out of a large s--t sandwich in '08.

In reply to an earlier post on Dec 2, 2007 11:42:39 AM PST
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In reply to an earlier post on Dec 3, 2007 11:07:15 AM PST
R. Ferrell says:
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